Power shortage, scanty rainfall push diesel sales in Punjab

Severe power shortage and scanty rain in the months of June and July—the paddy sowing period—in Punjab came as blessings for over 2,750 petrol pumps (retail outlets) in the state, as the consumption of diesel, mainly by the agriculture sector, went up to reach an all-time high. In these two months, consumption shot up by 19.30 per cent as compared to the same priod of the previous year.

It is pertinent to mention here that rainfall during the kharif season as a whole has been scanty in the state i.e. 68 per cent less than normal, which compelled farmers to depend on diesel pump sets for irrigation in absence of power. The spatial and temporal distribution of rainfall has been poor, which resulted increase in input cost due to consumption of additional quantity of diesel.

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According to the memorandum submitted to the Centre by the Punjab government for a relief package, the consumption of diesel in the state during June and July this year was increased by 41,815 MT and 54,573 MT respectively, compared to corresponding months of the previous year largely due to the drought conditions. Thus, it witnessed am increase of 15 per cent and 23.5 per cent increase over corresponding months of previous year. It is pertinent to mention here that paddy in Punjab was being transplanted from June 10 to fourth week of July.

According to state government estimates, based on current trend, the additional consumption of diesel during August and September would be 31,307 MT and 22,455 MT respectively. Although rainfall was not satisfactory in the state, the area under cultivation was not affected as farmers managed to sow paddy in about 27.80 lakh hectares more or less as compared to last year.

According to the memorandum, consequently, in order to augment the irrigation sources, large scale use of diesel pump sets has been resorted to, leading to an estimated increase in diesel in the state during the Khariff season to the tune of 1.186 lakh metric tonnes. Thus, the farmers have incur an additional expenditure of Rs 567.20 crore. Considering that lower level in dams will also affect the supply of surface water during Rabi 2012-13 and assuming an expenditure at the level of 50 per cent of Khariff, the additional expenditure on diesel is likely to be Rs 283.60 crore. Thus, the total estimated additional cost of diesel for irrigation through diesel run pump sets/gensets is likely to be Rs 850.80 crore, the memorandum states.

Punjab boasts of one of the highest concentration of petrol pumps. Often, dealers used to complain that high concentration of petrol pumps affected their business significantly but they are of the view that these two months were blessing in disguise to the owners.